States borrow but almost all must balance the budget. When they borrow it should be a project, not to cover a shortfall. This is not a federal requirement but a restriction the states put on themselves.

https://www.ncsl.org/research/fiscal-policy/state-balanced-b...

How many of those states have emergency powers provisions that would allow them to override that restriction?

I don’t have any special insight beyond what’s in the article. This is likely why state governments have been talking about federal aid.

State and local governments are allowed to borrow and they do quite a lot of it. The difference is they don’t have a guaranteed buyer for their debt like the federal government does with the federal reserve.

> The difference is they don’t have a guaranteed buyer for their debt like the federal government does with the federal reserve.

That is no longer true: https://www.federalreserve.gov/monetarypolicy/muni.htm

  On April 8, 2020, the Board of Governors of the Federal Reserve System
  (the Board), by the unanimous vote of its five members and with the approval of
  the Secretary of the Treasury, authorized the establishment and operation of the
  Municipal Liquidity Facility (MLF) under section 13(3) of the Federal Reserve
  Act (12 U.S.C. § 343(3)). The MLF is intended to support lending to state, city,
  and county governments.
  
  Under the MLF, the Federal Reserve Bank of New York (Reserve Bank)
  will commit to lend on a recourse basis to a special purpose vehicle (SPV). The
  SPV will purchase eligible notes directly from eligible issuers at the time of
  issuance.
  
  [...]
  
  The Department of the Treasury, using funds appropriated to the Exchange
  Stabilization Fund under section 4027 of the Coronavirus Aid, Relief, and
  Economic Security Act (CARES Act), will make a $35 billion equity investment
  in the SPV in connection with the MLF.

https://www.federalreserve.gov/publications/files/municipal-...